Other adjustments to income on Form 1040 in Lacerte

This article will help you understand and generate less common adjustments on Form 1040, Schedule 1. In previous years, these adjustments didn't have a dedicated line, and were written-in.

The IRS instructions for Form 1040 list the allowable adjustments and where to report them. Follow the steps below to generate the adjustment your client can claim.

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Archer MSA deduction

1. Go to Screen 32.2, Medical Savings Accounts (8853).
2. Enter a 1 or 2 in 1=self-only coverage, 2=family coverage.
3. Enter the Total MSA contributions that you made.
4. Enter the health plan's Annual deductible.

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Jury duty pay

1. Go to Screen 24, Adjustments to Income.
2. Scroll down to the Other Adjustments section.
3. Enter the amount in Jury duty pay given to employer.

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Expenses from rental of personal property (PPR)

1. Go to Screen 24, Adjustments to Income.
2. Scroll down to the Other Adjustments section.
3. Enter the amount in Expenses from the rental of personal property.

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Contributions to 501(c)(18)(D) plans

1. Go to Screen 10, Wages, Salaries, and Tips.
2. Enter the amount in Box 12.
3. Select the box 12 code H-Elective deferrals to 501(c)(18)(D).

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Excess deductions of 67(e)

1. Go to Screen 20.3, Estate or Trust Information (1041 K-1).
2. Scroll down to the Lines 9-11 Deductions section.
3. Enter the amount in (11a) Excess deductions on termination - Section 67(e) expenses.

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For other adjustments:

Follow these steps to generate adjustment codes that don't have a dedicated input field in Lacerte:

1. Go to Screen 24, Adjustments to Income.
2. Scroll down to the Other Adjustments section.
3. Click inside the field labeled Other (Ctrl+E) (Description and Amount).
4. Enter the amount and the write-in adjustment code to print on the form.

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Why is the Section 461(l) excess business loss shown as positive?

When a negative amount is reported on Form 461, line 16, the instructions state to report that same amount as a positive number on Schedule 1.

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How do I generate the Coverdell/ESA Contribution Worksheet?

Since Coverdell contributions are not deductible, the Lacerte Individual Tax program does not have an input field to enter this amount. However, the program generates a worksheet showing the maximum contribution to a Coverdell Educational Savings Account (based on Adjusted Gross Income).

To trigger this worksheet:

1. Go to Screen 24, Adjustments to Income
2. Select Education Related Adjustments on the section list on the right.
3. Enter 1 in the field 1=Coverdell ESA contributions worksheet. (Code 29 for the Taxpayer or Code 79 for the Spouse)

Note: The worksheet is for informational purposes only and will show whether a contribution is allowable based on income limits.

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